Vertical shift gains pace in Saudi cities

The phenomenon of building owners demolishing their old buildings and erecting new multiple-floor units has increased during the last five years in old districts in the Kingdom's larger metropolises.

The number of applications for licenses to reconstruct old buildings has increased by 300% in the last 10 years in most parts of the Kingdom. The number stood at 112,362 in 2011, compared to 37,585 in 2003, according to data of the Ministry of Municipal and Rural Affairs.

In Jeddah alone, some 14,476 licenses were issued last year, an increase of 30% compared to the previous year, according to Yasir Adas, head of Licenses at Jeddah Province.

As rents have increased, municipalities have allowed owners to add more floors to buildings and funds have been mobilised credit facilities, Jeddah-based finance adviser Faisal Sairafi told Arab News.

Sairaf predicted that the demolition of old buildings for new replacements would continue for years to come, especially as statistics indicate that nearly 60% of Saudis do not own their own houses.

Jeddah real estate broker in Jeddah Abdullah Al-Bluwi said that adding more floors to buildings or the demolition of buildings to construct new ones has become common practice in old districts.

He said the replacements currently represent 60% of construction activity in these districts, notably in northern districts such as Al-Faisaliyya, Bawadi, Safa, Aziziyyah, and Salamah.

Abdullah Al-Ahmari, head of real estate evaluation at the Jeddah Chamber of Commerce and Industry (JCCI) said that this would exert significant pressure on the infrastructure in the next few years.

He urged the municipalities to shift the thickly populated neighborhoods to new land plans, of which examples have been designed to fully absorb new streets, utilities and infrastructure projects.

In Riyadh municipality data shows the number of licenses approved for demolition and replacement also increased by over 30% in two years, standing close to 27,000 in 2012 compared to 20,013 in 2010.